Commodities prices plummet on Japan's crisis

The Associated Press, None

Commodities prices plummeted Tuesday as the nuclear crisis in Japan raised more questions about the nation's ongoing demand for grains, metals and oil.

The steepest price declines included wheat, corn, soybeans, gasoline and palladium, a metal used in automobile catalytic converters. Even prices for gold and silver, typically considered safe-haven holdings, dropped.

Potentially dangerous levels of radiation leaked from a crippled nuclear plant in Japan days after a deadly earthquake and tsunami hit the country.

Traders are awaiting more clarity about what lies ahead for Japan because it is a huge importer of raw materials. They are concerned that demand will decline as Japan focuses on containing the nuclear crisis and recovering from the disaster that killed thousands.

Many are selling commodities in favor of assets considered relatively safe, such as U.S. Treasurys and the dollar.

"Everything is getting clobbered," LaSalle Futures Group analyst Matt Zeman said. "I think investors are starting to get their arms around the economic and financial impact that this crisis is going to have."

He expects commodities contracts to continue to sell off in the coming weeks until more details surface about the impact of the disaster.

In 2009, Japan was the world's third-largest importer of agricultural products and was the fourth-largest market for U.S. agricultural products, the U.S. Agriculture Department said. It ranks among the top three markets for U.S. exports of wheat, corn and hogs.

Japan also is the world's third-largest importer of oil, consuming about 4.4 million barrels per day.

In agriculture contracts for May delivery, wheat fell 53 cents, or 7.4 percent, to settle at $6.6775 a bushel, corn dropped 30 cents, or 4.5 percent, to settle at $6.36 a bushel and soybeans lost 70 cents, or 5.2 percent, to settle at $12.70 a bushel.

In metals contracts for April, gold fell $32.10 to settle at $1,392.80 an ounce and platinum lost $46.70 to settle at $1,705.60 an ounce.

March copper lost 4.85 cents to settle at $4.1250 a pound, May silver fell $1.723 to settle at $34.117 an ounce and June palladium gave up $43.30, or 5.8 percent, to settle at $704.90 an ounce.